B. Francis Saul II rarely talks publicly about the real estate and financial empire he controls.
"I have never given a personal interview," Saul told a Washington Post reporter two years ago. "Our style is to be low-key and private."
For a while last week, the successful and secretive Saul changed his style.
Saul is president of Chevy Chase Savings & Loan Inc., the largest of the 102 Maryland thrift associations that were privately insured when a crisis struck the industry earlier this month.
Last Wednesday night, Saul, in a rare appearance before the local press, triumphantly announced that Chevy Chase, which has about $2.3 billion in assets, had won federal insurance protection of $100,000 per account for its depositors.
"If you had a million dollars in here, you could withdraw it tomorrow," the smiling Saul said, referring to the emergency restriction that had limited withdrawals at Chevy Chase since May 14 and still limits withdrawals at many of the privately insured Maryland thrifts to $1,000 a month on each account. "We're open for business as usual, and we are insured by the FSLIC government insurance. . . .It's very gratifying. I think it is very good news."
Chevy Chase Savings & Loan is only one corporation in a collection of intertwined companies controlled by Saul that all have their headquarters at 8401 Connecticut Ave. in Chevy Chase.
The interlocking network of companies that make up the Saul empire offers customers a wide range of products and services, including checking, saving and lending, insurance, mortgage banking, real estate development, valuation and management.
Saul recently added a travel agency that distributes tickets through the S&L's 25 branches and is offering travelers checks without fees as part of a marketing effort designed to increase business for both the S&L and the new agency.
While it is not unusual for real estate developers -- and other business people for that matter -- to create complementary companies that can supply cash or services, the financial clout of the Saul companies is distinctive.
For example, in the midst of a crisis last week that called for fast action by a financier with a deep pocket, Saul benefited tremendously by owning and controlling this network of successful firms.
When Saul was told that Chevy Chase S&L needed to raise an additional $75 million in capital to qualify for federal deposit insurance, he was able to come up with two-thirds of the funds quickly by moving assets from other companies he controlled to Chevy Chase.
Saul companies transferred $50 million in capital to the S&L, including $30 million that B. F. Saul Real Estate Investment Trust invested in the S&L, $8 million invested by Realty Income Trust, an independent real estate firm in which Saul reportedly holds a 60 percent stake, and $12 million from B. F. Saul Co. and several other family-owned affiliates. Saul raised $25 million from outsiders by selling debt securities to American Security Bank and Marine Midland Bank.
In a press release last week that illustrated the close links between Saul entities, the B. F. Saul Real Estate Investment Trust, which has concentrated on real estate development, offered this explanation for its $30 million investment in Chevy Chase S&L:
"The trust believes that its investment will allow it to participate in the growth of this market and will provide diversification to balance its real estate operations.
"Chevy Chase, with over $2 billion of assets, was founded in 1969 by B. Francis Saul II, president. It is the largest savings institution in Maryland and in a dominant position in the Maryland suburbs of Washington, one of the fastest-growing banking submarkets in the country."
Public documents filed with the Securities and Exchange Commission reveal that the business network also offers the companies, and Saul, lucrative opportunities to profit as one entity sells services to another.
For example, Saul controls B. F. Saul Advisory Co. and Franklin Property Co., which earned fees of $2.369 million and $6.444 million, respectively, in 1984 for providing services to B. F. Saul Real Estate Investment Trust, a publicly traded company in which Saul holds a controlling 55.5 percent stake worth about $56 million.
In addition, public documents say the REIT pays for all travel and in-house legal expenses incurred by Saul Advisory and Franklin in connection with the affairs of the trust.
The 1984 fees were substantially above the $1.92 million and $3.25 million received by Saul Advisory and Franklin Property in 1982. Public documents filed by Saul say the firms receive fees that are competitive with market rates.
Sources said Saul, who inherited a real estate company that was founded by his grandfather in 1892, has made millions in real estate. One of Saul's most visible real estate projects in Washington, Market Square, is a 225,000-square-foot office building at the corner of Pennsylvania Avenue and 6th Street NW that is expected to open next January. Westminster Investing Co. is the name of the Saul subsidiary developing that property.
Saul told the Pennsylvania Avenue Development Commission that he is president and chief executive officer of Westminster, but the construction manager and leasing agent for the project both carry a more readily identifiable name: the B. F. Saul Co.
Saul's Real Estate Investment Trust has extensive holdings in the area, including the Arlington, Va., Howard Johnson's hotel; Holiday Inns in Sterling, Va. (adjacent to Washington Dulles International Airport), Tysons Corner, Gaithersburg and Norfolk; shopping centers including White Oak in Silver Spring, Flagship in Rockville, Outlet Mall in Fairfax, Beacon Mall in Alexandria, Southdale in Glen Burnie and Hampshire-Langley in Takoma Park; office and industrial projects in Gaithersburg and McLean; and, as of last Sept. 30, about 2,000 acres of undeveloped land in Georgia, Florida, Kansas, Missouri, Maryland and Virginia.
Saul has earned the respect and admiration of many of Washington's top lawyers and real estate investors, who describe him as ethical and hard working. But they claim not to understand the complex relationships among Saul companies, even though many of them said they believe Saul sometimes uses Chevy Chase S&L to support the activities of the other entities.
"I have a high regard for his business acumen and ability," said Robert R. Linowes, of the law firm of Linowes & Blocher. "I am not privy to the relationship of the Chevy Chase Savings & Loan and the B. F. Saul REIT. He Saul pays very close attention to what he is doing."
"He very definitely is a big player in the Washington scene and has done extremely well in the real estate business," said Leslie Silverstone, a senior vice president at Dean Witter Reynolds Inc.. "He very definitely is interwoven personally with a lot of these companies, and some of his other companies feed the S&L. Since it the Saul empire is privately held, he just moves money off one balance sheet and onto another."
"I know nothing about it Chevy Chase S&L ," said First American Bankshares Chairman Clarke M. Clifford. "The truth is I don't have any idea about Chevy Chase S&L ," said First American President Robert A. Altman.
One knowledgeable source who said he has been involved in transactions with Saul said, "Everything is very tightly held and managed. In my mind, he Saul is one of the best operators in town. . . . It is a fascinating situation. He is a mystery man. If you can figure out how he does what he does, you will be able to accomplish something people have been trying to do with no success for years."
One of the only times Saul has been in the public spotlight was during the 1979-81 period, when he served as chairman of Financial General Bankshares Corp. Saul negotiated the controversial acquisition of the bank by Middle Eastern investors.
Saul, who was born on April 15, 1932, agreed to stay on the board of directors of the bank during a transition period following the takeover, which ended last month when he chose not to stand for reelection as a director.
At the time of the takeover, Saul owned, either personally or through his companies, 1.35 million shares of Financial General, according to SEC documents. Saul paid an average of about $14 a share and received $33.80 a share, which means his personal profit on the deal may have exceeded $25 million.
One Wall Street analyst said the B. F. Saul Real Estate Investment Trust is currently operating with a negative cash flow because the company has been aggressively acquiring and developing properties.
Last year, the REIT had revenue of $67.9 million, a net loss of $5.1 million, and a positive cash flow from operations of $2.5 million. The difference between the loss and the positive cash flow is made up of noncash expenses, including $6.9 million of depreciation.
Saul has earned the loyalty of current and former employes. Former Saul employes interviewed by The Washington Post refused to provide specific information about how all of the companies headquartered at 8401 Connecticut Ave. fit together.
It may be that only Saul knows just how his empire works.